Second term: Obama’s impact on trucking

Friday, December 21, 2012

Behind the Wheel

Randy Mullett

vice president of government relations and public affairs,
Con-way Inc.

With the long-anticipated MAP-21 Surface Transportation bill signed into law, and the reauthorization of funding for the Federal Aviation Administration secured, 2012 saw multi-year negotiations, campaigns and debates around transportation finally come to a resolution. And with November’s elections behind us, a larger and broader intellectual exercise has begun: predicting the impact the second Obama administration term will have on the transportation sector.
The focus has moved to ways in which broader administration priorities around labor, energy and the environment might shape the transportation industry’s working landscape over the next four years.
With the current administration proposing so many fundamental changes to the way Americans will live and do business, and with polls leading up to November’s election indicating a distinctly possible reversal in course, many businesses simply did not have enough solid information in 2012 to make educated planning decisions for the future. The good news for 2013 is that a lot of that uncertainty is removed. Some of the more politically controversial, and therefore election-dependent, policies will become law.
We at least know the general direction most policy actions are likely to take under a second Obama administration. We will have to deal with health care change as major reforms under the Health Care Affordability Act will be implemented over the next four years. Environmental activism will return to the forefront, particularly as it relates to energy development, renewable fuels and reducing greenhouse gas emissions. Labor policy will be more pervasive and have more impact on our business. And then there is corporate income tax policy. Will changes increase the burden on business or make us more competitive with the rest of the world? Specifically for the transportation world, while MAP-21’s passage last year gives us some directional policy certainty for now with surface transportation, the debate already has begun on the next transportation bill, which will go before Congress in a very short 18 months.
In this post-election environment, there will be pressure to adjust and adapt. We know the landscape is going to change significantly. Whether or not we like the direction of the next administration, at least we know what the playing field looks like, and generally the rules around the game, so we can respond accordingly. Ultimately that’s better for our industry, our customers and their supply chains. It enables us to know with more certainty where to make capital investments.
Whatever the outcome, transportation always has been a resilient industry. We’ll roll with the punches and find a way to succeed and create the jobs that keep the economy moving.
One area where we hope to see progress is around domestic energy policy. This administration seems intent on placing more emphasis on expanding renewable energy, such as wind and solar, yet still seems determined to impede the development of the most abundant and proven domestic energy resources we have, namely oil and natural gas. New technologies today enable us to economically and environmentally recover vast stores of crude oil and natural gas, which previously were unavailable. Studies project that with these resources, by 2017 the United States will surpass Saudi Arabia as the larger producer of domestic energy. New natural gas reserves are so abundant that it has driven down the cost of this fuel to the point where it is becoming economically viable to consider it as a long-term fuel solution for larger commercial truck fleets.
Closely tied to energy policy are this administration’s broad goals for the environment — in particular, policies that tie infrastructure funding more closely to emissions. This could be presented as a fuel tax tied to an inflation index or as a carbon tax, but it is unlikely to be the kind of one-step increase to the gas tax we have seen in the past. Whatever the packaging, we can be fairly certain that there will be a structure in place to restrict overall energy usage and fund infrastructure through emissions reductions and that the economics of driving fossil fuel-burning vehicles will not improve in the foreseeable future.
Yet even if we have trucks and they have fuel, without safe, qualified drivers, it makes no difference. For this reason, administration policies with respect to workplace law, commercial driver licensing, hours of service and highway safety, industry productivity and efficiency, and health care all will influence our ability to attract and retain good, qualified, and safe drivers.
One thing is for sure as we enter 2013: there will be no lack of challenges as the new administration begins to put its stamp on the next four years. There has never been a more important time to be involved in the legislative and regulatory debate. These outcomes can and will influence the transportation industry, and if we do not let our voices be heard, we have no one but ourselves to blame when decisions are made that have negative consequences.
I have no doubt that transportation companies are prepared to join with other constituents and work collectively within any policy framework. The transportation industry is particularly savvy when it comes to responding to shifting conditions, proving time and time again that they can find ways to succeed in the face of obstacles. After all, transportation companies only really need three things: fuel, trucks and drivers — and as long as we have enough information to task our innovators with keeping those things affordable, transportation companies can move confidently forward regardless of any hurdles outside of our control.Mullett is vice president of government relations and public affairs at Con-way Inc. He can reached by email.